Inside the Industry - AWMA
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EM 12 November 2004 EM by Anthony J. Buonicore and Dianne P. Crocker EM Inside the Industry T he feverish pace of industry consolidation in the 1990s meant that the big environmental consulting firms got even bigger. Nevertheless, in terms of sheer numbers, small consulting firms still outnumber large ones in our industry. If you work for a small consulting firm, therefore, you inevitably compete with bigger firms for business. And if competing with your biggest rivals conjures up images of David and Goliath, you are not alone. Take heart. Small players in all industries continue to find ways to woo clients away from industry giants by tapping into the very talents that got them started in the first place: entre- preneurial veins of ingenuity, creativity, and resourcefulness. There are small startups everywhere that thrive in the shadow of giants by embracing one or more of several key strategies. Below are some examples of companies who, by being vigi- lant and focused, manage to foster loyalty in their clients and stay competitive to boot. SATISFY YOUR CLIENTS In the late 1950s, a small startup rental car agency surfaced. It was built on the premise of giving customers an experience that was superior to the competition. From the very begin- ning, the company’s management strove to personally get to know each and every client and routinely placed calls to thank them for their business. As the company grew, it never lost sight of its clients. To track customer satisfaction in a mean- ingful way, the company developed ESQi, the Enterprise Service Quality Index, which is run monthly at each branch to rank customer satisfaction. Every client is asked two basic questions: whether he or she was satisfied with the quality of the service, and whether he or she would be likely to return. Employees at any branch who fail to achieve above-average scores on their ESQi do not get promoted. Client satisfaction, the premise on which this company was based, still applies. The success of Enterprise Rent-a-Car, now a $7 billion interna- tional enterprise, is the result of one basic question: Is the client satisfied? SWEAT THE SMALL STUFF A small, midwestern hardware business with a handful of locations was losing customers and revenue to giant superstores and home improvement centers like Home Depot, Wal-Mart, and Lowe’s. Fortunately, management recognized this trend and made some tough decisions that paid off. Rather than seeking a “quick fix” to the problem, the company imple- mented a proactive strategy based on a long-term, obses- sive attention to detail. For starters, management trimmed expenses throughout the company for everything from light bulbs to office supplies to employee perks and even the size of its workforce. As in any competitive industry, the biggest challenge for a small company competing with a much larger rival is pricing. Vowing to offer prices that are within 10% of the competition, the company routinely spies on its larger rivals. The effort has paid off. By mid-2004, Umber’s Ace Hardware turned things around and posted a 4% growth in revenue. FIND YOUR NICHE Another key point to remember is that, by nature of their size, small companies can offer something that large companies cannot. The secret is to identify your competitive edge and then exploit it. Focus on a niche where you excel; preferably one to which your biggest competitors, for all their savvy and economies of scale, cannot devote as much attention. The only Copyright 2004 Air & Waste Management Association
Transcript of Inside the Industry - AWMA
EM Inside the Industry
12 November 2004EM
by Anthony J. Buonicore and Dianne P. Crocker
EMInside the Industry
T he feverish pace of industry consolidation in the 1990smeant that the big environmental consulting firms goteven bigger. Nevertheless, in terms of sheer numbers,
small consulting firms still outnumber large ones in ourindustry. If you work for a small consulting firm, therefore,you inevitably compete with bigger firms for business. And ifcompeting with your biggest rivals conjures up images of Davidand Goliath, you are not alone.
Take heart. Small players in all industries continue to findways to woo clients away from industry giants by tapping intothe very talents that got them started in the first place: entre-preneurial veins of ingenuity, creativity, and resourcefulness.There are small startups everywhere that thrive in the shadowof giants by embracing one or more of several key strategies.Below are some examples of companies who, by being vigi-lant and focused, manage to foster loyalty in their clients andstay competitive to boot.
SATISFY YOUR CLIENTSIn the late 1950s, a small startup rental car agency surfaced. Itwas built on the premise of giving customers an experiencethat was superior to the competition. From the very begin-ning, the company’s management strove to personally get toknow each and every client and routinely placed calls to thankthem for their business. As the company grew, it never lostsight of its clients. To track customer satisfaction in a mean-ingful way, the company developed ESQi, the EnterpriseService Quality Index, which is run monthly at each branchto rank customer satisfaction. Every client is asked two basicquestions: whether he or she was satisfied with the quality ofthe service, and whether he or she would be likely to return.Employees at any branch who fail to achieve above-average
scores on their ESQi do not get promoted. Client satisfaction,the premise on which this company was based, still applies.The success of Enterprise Rent-a-Car, now a $7 billion interna-tional enterprise, is the result of one basic question: Is theclient satisfied?
SWEAT THE SMALL STUFFA small, midwestern hardware business with a handful oflocations was losing customers and revenue to giant superstoresand home improvement centers like Home Depot, Wal-Mart,and Lowe’s. Fortunately, management recognized this trendand made some tough decisions that paid off. Rather thanseeking a “quick fix” to the problem, the company imple-mented a proactive strategy based on a long-term, obses-sive attention to detail. For starters, management trimmedexpenses throughout the company for everything from lightbulbs to office supplies to employee perks and even the sizeof its workforce. As in any competitive industry, the biggestchallenge for a small company competing with a muchlarger rival is pricing. Vowing to offer prices that are within10% of the competition, the company routinely spies onits larger rivals. The effort has paid off. By mid-2004, Umber’sAce Hardware turned things around and posted a 4% growthin revenue.
FIND YOUR NICHEAnother key point to remember is that, by nature of their size,small companies can offer something that large companiescannot. The secret is to identify your competitive edge andthen exploit it. Focus on a niche where you excel; preferablyone to which your biggest competitors, for all their savvy andeconomies of scale, cannot devote as much attention. The only
Copyright 2004 Air & Waste Management Association
November 2004 13EM
About the AuthorsAnthony J. Buonicore, P.E., DEE, QEP, is presi-dent and CEO of Environmental Data Resources
Inc. (EDR) in Southport, CT. Hise-mail address is [email protected].
Dianne P. Crocker is managing director of EDR’sMarket Research Group. Her e-mail address [email protected].
real way to do this is to vigilantly study your competitors’tactics and service slates and to search for ways to differentiateyour company’s offerings. You will find that your firm canoffer something the competition cannot, whether it’s a cer-tain expertise, the value of your local presence, inside knowl-edge of local environmental regulations, customized service,lower overhead, or some other edge that they can’t match,even given their critical mass.
DELIVER WHAT CLIENTS NEEDFortune magazine recently featured an interesting piece on thestrategy of a tiny New York City coffee shop that operates outof a refurbished electric company truck. The Mudtruck, whichis parked curbside within one city block of two national coffeechains, still manages to thrive. How? Everything the businessdoes reflects a strategy that hinges on distinguishing itself fromthe large national brands. Rather than trying to emulate thecompetition, The Mudtruck strives to be exactly the opposite.It offers less expensive coffee in an interesting atmosphere—asound system, for example, pipes out music by local bands. Tocut down on employee training time, the company hiresformer bartenders, who are already skilled at mixing drinks.The company’s first retail store, which opened this year, fea-tures artwork by local artists, and the coffee is served in mugsmade by a local potter. By marketing itself as a local establish-ment, not a faceless retail giant, and by operating with lowoverheads, the business has found a way to successfully dis-tinguish itself from its popular neighbors and inspire customerloyalty. The strategy has paid off: Sales last year reached a halfmillion dollars.
What successful small companies have in common is anability to differentiate themselves from the competition. Allthree companies mentioned above have managed to competeeffectively against much larger industry competitors by mar-keting to their strengths. The lesson: Find a way to stand outfrom the competition by touting the unique experience youcan offer. No matter how big the competition, no other com-pany can compete with the personal relationship you have withyour clients. Strive to keep giving your clients more and betterreasons to use your services. You might even be rewarded bymoving your company up a notch or two in the process!
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